Yield What Do you Chase?

[brisbane 04]

Well said Noodle

 

[Jen_PFR]

Agree 100% with Noodle - great yield doesn't achieve a lot if you don't do anything with the money you're getting!

 

[westminster]

Gwelup current projections will be 7%

Westminster is 6.9% but was MUCH lower before we demolished and put 3 villas on it.

 

[our obsession]

Hi All,
For a buy and hold what Yield do you chase in the current market conditions? I'm looking for a yield of approx 6.9%.

Nothing been purchased or built under 8.3%. Some far greater, around double.

 

[A'PEXi]

for those with properties that have strata/bodycorporate rates of say $x per week - did you take this into account when aiming for your 7 or 8% yield? i tend to minus this cost from the 'rent per week' when calculating?

 

[menty]

Can someone explain this sharia law ?

 

[Noodle]

Can someone explain this sharia law ?

Effectively under Islamic Sharia Law, making money from money is not permitted, therefore charging or being charged interest, will restrict your financing capabilities in non islamic societies.

Its a little bit more complex then I am describing (I'd suggest googling), and certainly wont affect most markets, but can at least in my opinion inflate the yields within predominantly islamic areas, as ultimately it will force many to rent in a specific area. On the flip side however it could be argued that this also holds back capital growth as the predominant demographic are unable to create the demand necessary to drive up prices relative to other areas not so greatly affected by the restrictions.

Hope that makes some sense. I think Auburn, NSW is a good example of a sharia law affected suburb.

All that said there are obviously still ways around this as a number of lenders have some innovative products out there, however the level of competition and therefore quality of product is quite possibly less competitive.

All the above is just my opinion. Dont accept as gospel.

 

[locko24]

.

No one really willing to risk neutral/negative cashflow on here?

I'll take a zero percent yield if i can get a 20% CG gain

 

[InspiredByProp]

Just calculated my first IP apartment using this formula:

Rent - Loan Interest - Expenses(strata, water, council)
DIVIDED BY
Purchase Price + purchase cost (stamp duty, solicitor fee, bank fee, etc)

= 0.35%.

So, I can say my IP is currenly +ve geared

 

[our obsession]

Nothing been purchased or built under 8.3%. Some far greater, around double.

Mine are regional Victorian cities, and not at compromise to growth. It's a fallacy high rental yield 'means' low growth.